Insurance Article, The Insurance Times 2021, The Insurance Times May 2021



Technology is making an impact in almost every industry including insurance. The use of information technology has a huge impact on the Indian insurance industry and the unthinkable has become doable now. Insurance industry has always been very conservative to adapt technology and insurance is one of the least innovative areas for consumer’s experience, but things have definitely changed in the last few years, especially in India. Around 10  years back, we were not even able to purchase insurance online, but today technology has become a major industry force. This transformation is giving huge advantages to the insured in terms of providing competitive premium and easy claim settlements. Insurtech no doubt is the next billion-dollar opportunity for insurers operating in India.

Technology has imposed a transformative effect on the insurance sector. Despite the fact that the general insurance business in India has been growing at a healthy rate of over 14 per cent from the last few years but its penetration level is just less than 1 per cent of India’s GDP. India continues to be a grossly underpenetrated market with a non-life penetration at one-third of the global average. In the financial year 2018-2019, gross direct premiums of non-life insurers reached Rs. 1.69 trillion (US$ 24.14 billion), showing a year-on-year growth rate of around 14%, but a clear issue of insurance penetration can be seen despite recent growth numbers. This is also true that from the last few years, Insurtech has provided new ways of selling insurance and has become a vital tool for increasing insurance penetration. Digitization is driving an unprecedented shift toward lower cost structures and greater agility in the insurance industry. Technology is ruling the insurance industry and many competitors have started working on “InsurTech” by exploring different ways to adopt technology, which is cost-effective, and improve the efficiency of the company.

Insurtech has started making insurance better, faster, simpler, cheaper, and more reliable through cloud-based insurance systems, artificial intelligence, and blockchain technology and with the internet of things, sensors feeding data into real-time risk management systems, and predictive claims models.

In this article, you will be able to know, how insurtech is helping in increasing insurance penetration through building new products and services and how insurtech has made insurance more and easily reachable to all sections of society. The broad objective of this article is to identify the new and evolving technology that enhances the performance of the company, helps in fraud detection and effective client servicing.



Internet of things (IOT), artificial intelligence (AI), Block chain technology, Point of sale (POS), Insurance self-network platforms (ISNP), On-board diagnostics (OBD)



A digital revolution is quietly happening in India.  The share of premium received through an online channel in  India is still very small, but the same is rising. It is proved through some of the surveys that consumers are using more and more internet for research and that the internet has become a trusted source of advice for insurance. Digital technology has made some of the insurance companies as market leaders.

Digitalisation is getting a lot of momentum in the Indian industry and the insurance sector is emerging out to be one of the biggest beneficiaries – in regard to enhancing its footprint, selling of new policies, settlement of claims and creating digital intermediaries – as technology is playing a crucial role in insurance outreach. Intermediaries and agents are an integral part of the business to help reach insurance penetrate into uninsured areas but in majority of the cases insurtech is being used as a mean of distribution for existing products to new customers, in addition, policyholders are now often provided with an online platform to get their policy easily. Chatbots are also getting popular among policyholders. It allows the customers to open an online conversation window to raise queries. Insurtech is having a direct impact on increasing insurance penetration but there is lot more potential yet to be realized particularly in the area of internet of things, blockchain technology etc.

Insurance penetration for any year is defined as the ratio of premium underwritten in a particular year to the GDP of that year. We have witnessed that India has become the world’s fastest-growing major economy, but insurance penetration stands continually low in Indian markets in comparison to other developed markets.

The  Indian insurance market, which currently accounts for around  2% of the world’s total insurance premiums, is having a huge business opportunity due to low penetration and through effective use of different technologies, the penetration level may increase.

Due to some of the factors like young population, healthy savings and investment rates etc., the growth optimism is strong for a country like India. Around 33 general insurance companies are operating in India, and all are running in the race of digital disruption. Insurance companies keep working on market analysis for technologies and digitization for better communication with customers. The use of big data, artificial intelligence, and cloud computing is changing the nature of work and the structure of the economy. This shift started with companies such as Apple, Amazon, Netflix, Facebook, Google, Salesforce, and Uber, which are creating online structures that enable a wide range of digital activities. They have opened the doors to radical changes in how we work, socialize, create value in the economy, and compete for profits. Use of technology is changing digital behaviors and customer expectations as customer want quick policy, quick claims, quick renewals and instant services. Today’s generation is tech-savvy; they want everything on mobile app. Insurance companies are redefining their structure according to customer expectation. Recently, insurance companies are bombarded with a lot of technology in the market like Artificial Intelligence, Blockchain, Machine Learning, Predictive Modeling, IOT, Telematics, and Mobile Application etc. which all are useful for some or the other way in an insurance company. Companies started launching pilot survey for use of technology to check the efficiency of the technology before adopting it.

Insurance technology is undoubtedly playing an important role between customer and agents’ interactions. Most of the channels for delivering insurance products are getting digitized, thereby increasing efficiency and reducing turnaround time.

Most of the insurers are now giving advisory services related to risks and claims through their digital platforms. Insurers are increasingly using technology for delivering sales and services to their consumers in a simplified and seamless manner.

Moreover, the adoption of technologies has also simplified the otherwise complicated insurance products and services; thereby helping customers in making smart choices. The world is changing at a fast pace and understanding ever-evolving customer needs is imperative in serving effectively and efficiently.


Reasons for insurtech in India

Rising Customer Expectations

The Revolution of e-commerce has forced insurers to think differently in order to meet the rising expectations of consumers who are demanding better, faster and more relevant services.

Government initiative of Digital India

Strong  digital  initiatives  by  the  Indian  government  and  regulatory  authorities,  such  as  Aadhar-based  identification,  eKYC,  digital  lockers,  Unified  Payments  Interface,  and  more  recently,  the  mandate  for  e-insurance  accounts,  are  creating  enabling  systems  for  simplification  of  transactions coupled  with  an  increasing  smartphone  penetration,  huge  markets  that  were  not  cost-effective  to  service  earlier  due  to  lack  of  reach  and  distributor  interest  in  pursuing  small-ticket  premiums,  are  now  becoming  accessible  to  insurers.

Competitive pressure

As  competition  intensifies,  margin  pressures  are  pushing  companies  to  look  at  more  efficient  ways  of  doing  business – whether  by  reducing  costs  or  improving  efficiency.  Especially  in  non-life  insurance  where  contracts  are  of  a  much  shorter  duration  than  in  life  insurance,  there  is  a  constant  need  to  create  differentiators  that  will  enable  insurance  companies  to  attract  and  retain  customers.

Access to capital

There  has  been  a  mushrooming  of  incubators  and  start-up  accelerators,  which  provide  financial,  marketing  and  networking  support  to  insurers. In  the  forefront  are  large  organizations  such  as  Swiss  Re,  Oracle  and  IBM  who  are  aggressively  funding  and  supporting  insurtech  start-ups,  with  the  objective  of  benefiting  from  new  solutions  and  fresh  perspectives.


Types of Technology used in different Segments of Insurance

Crop Insurance

  • Pradhan Mantri Fasal Bima Yojana (PMFBY)
  • Restructured Weather Based Crop Insurance Scheme (RWBCIS)

Insurtech is acting as an enabler for increasing penetration under crop insurance. Internet is one of the examples wherein it is providing a perfect platform for use of technology in crop insurance. All the stakeholders of crop insurance starting from Government, insurance companies to distributor are having an access to detailed information of Underwriting and claim data. The cost of collecting this data through manual form has reduced due to use of internet.

Technology is providing all the critical information to insurers in a fraction of seconds with less cost. Satellite, drones, mobile cameras are highly cost-effective means of collecting data and this cost efficiency is certainly encouraging insurance companies to increase crop insurance penetration.


We see that traditional distribution networks are not only economically unviable for insurance firms but are also cumbersome from a customer perspective. Marketing and distribution in today’s age require having an omnichannel presence. The millennials have come to expect 24×7 service availability. They want to have policy comparisons, quotes and policy terms and conditions made available to them in a device-agnostic online platform, at a place of their choosing. An online distribution channel is a low hanging fruit, which also leads to the most coveted commodity of them all, consumer data. Since this segment of digitalization has already seen considerable disruptor activity, any lapses in capitalizing on it can prove detrimental to an insurance firm.

Some of the products like travel, motor and personal accident insurance require very little changes as they are mostly based on prospect information. The intervention required for such products is minimal and the training and exams for such persons could be of a lesser degree than those for a full-fledged distributor. In fact, last year, IRDAI had allowed the general insurance industry to use point-of-sale persons to sell general insurance products. For this, it identified products that are simple to understand, and in which the benefits are stated upfront and are fixed and predefined.

Therefore, at an aggregator level, people must understand that there is huge potential for insurance in India. India still has low, single-digit insurance penetration – despite the number of insured increasing during the last few years. With a population of over 1.3 billion, it is an epidemic. We are incredibly underinsured

To cross-sell personalized insurance, some of the insurers have started looking beyond traditional distribution channels and explored strategic partnerships with newer channels such as retail aggregators (Amazon, Flipkart, etc.) Telecommunication providers (Airtel, Vodafone, Jio, etc.), smart home devices manufacturers (Amazon, Xiaomi, etc.), AR/VR device providers, telematics device manufacturers, sharing economy providers (Uber, Ola, OYO, etc.), transportation providers (IRCTC, bus providers), and messaging apps (WhatsApp, Facebook messenger, etc.). Allianz, for example, has set up a joint venture with Chinese Internet giant Baidu that enables it to apply data about consumers’ online behavior to create customized offers

For example, Acko General has tied up with Amazon, Bajaj Allianz has tied up with Flipkart to offer mobile insurance Etc. Shriram General, Bharti Axa, and Bajaj Allianz has tied up with IRCTC to provide PA cover to Passengers.

With mobile and Web technology, consumers across tier 2, 3 and 4 cities and rural India will have access to multiple insurers and transparent prices. Apart from reducing the cost of delivering the policy, and cutting down the branch network, online insurance selling also delivers transparent information to consumers.




Two lines of insurance that are using more insurtech for increasing insurance penetration are motor and health.

For health, wearable monitoring devices are already very popular among insurers to access live data on their insured instead of relying on health records and claim history. This sort of live data analytics will lead to more accurate risk assessment and pricing and may in turn lead to premium discounts or rewards for policyholders who stay healthy and active.

Similarly, with motor insurance, a device called telematics could be plugged into the car and the insurer could receive data on how the policyholders drive the vehicle, depending on the results, insurers can make the premium adjustment.

A move towards flexible add-on covers of shorter durations will be made possible through the Internet of Things (IoT) and wearables. Through this technology, asset usage can be constantly monitored. In the future, car insurance may cover and be priced for city driving and customers would need to buy an add-on cover when going on a road trip.


Image and video-based systems are expected to help in claims processing, fraud identification,  accurate documentation and for notes recognition. For example, research on using the image of a human face to map out diseases and morbidities is currently under way.

Insurance technologies used for increasing insurance penetration:

  • Mobile Applications
  • Internet of things
  • Blockchain
  • Predictive Analysis
  • Machine Learning and Artificial Intelligence
  • Social media
  • Telematics
  • Drone
  • RPA (Robotic Process Automation)
  • Cloud Technology

Mobile Applications

Mobile application has become one of the most important tool for increasing insurance penetration in India. Mobile Apps are increasing day by day not only in insurance industry but every company has an application to connect with the clients and customers. It is now a common trend to see insurance companies launching different types of mobile apps for providing round-the-clock (24×7) support to customers and tools that allow for better and swifter engagement with the company. According to the data published in one of the reports, 281 million people in India use mobile internet every day and India has become the world’s fastest-growing market for mobile apps. Mobile Application has become one of the fastest, better and cheaper way to connect with clients. Customer has to download the app either from Android or from Apple IOS and he can manage all the services from this app. An app can provide various services starting from Proving underwriting to claim settlement and many more and all transaction becomes instant in one click. It also helps in paying bills, storing data like insurance policies and various document, check the status of the claim, getting quotes, read articles and blog about financial sectors, get information about various insurance product coming in the market, claims can be reported by uploading picture and one will get the claim amount in the app wallet or account.

However, there are various characteristics which a mobile app can have in order to increase its usage among clients.

  • Convenient to use and speedy, faster in processing information
  • Customization and Flexible
  • Security
  • Better customer services
  • Features and comparison on various policies
  • User experience
  • Informative by Blogs and Articles
  • Interactive and catchy user interface
  • Weather or an event tracking, Geo-location technology
  • Easy and quick claim settlement

Health underwriter can also use this for better underwriting. Connected devices and wearable provide deep insights into the customer’s physical condition, like blood pressure, temperature, pulse. Now, the insurer can even explore the client’s lifestyle patterns, such as the number of steps per day, or how often and how long it takes someone to brush their teeth. In addition, all this data is available in real-time, which provides additional value for insurance companies. This will help in reducing premium or taking discounts for insured by allotting scores and points on the basis of risk-taking ability by an insurance company.

Mobile app used by different insurers:

  • Reliance General Insurance: Reliance Selfi App
  • Shriram General Insurance: Shriram M. Nova, I Nova
  • Bajaj Allianz: Insurance Wallet
  • ICICI Lombard: Insure

Customer can easily use the above-mentioned mobile apps. These applications ease the claims processes significantly with features like live video calls assistance with claim advisors, renewal of policies with just a tap, quick access to nearby garages, hospitals etc. These apps also allow users to track the claim/service status in real-time. The mobile app also allows users to safely store all their policy and other important documents like Driving License, RC Book, etc. in an E-Doc vault, which is easily accessible.


Internet of Things

With the traditional view, the general insurance industry is always viewed as an industry, which financially compensates individuals and organizations for losses incurred by them. However, the biggest challenges faced by insurers are claim valuation. The process is very tedious for almost all the insurers because of the amount of data that needs to be analyzed before paying a claim. Customers also face long processing times, especially after dealing with a financial loss. Furthermore, there is always a high probability of fraudulent claims, which necessitates a rigorous validation process. IoT can be helpful in eliminating such issues. IoT sensors can be used to track key parameters on an insured person or object. If the object of insurance is a person, they can be given wearable devices that track basic health parameters over time. In the event of an insurance claim, the recorded data can help prove allegiance to clauses in the insurance policy. In the case of auto insurance, a car that is insured is fitted with sensors and on-board diagnostics (OBD) systems to monitor the performance of the car. These parameters will help the insurer to assess the premium that the driver will have to pay, with lower premiums for safe drivers. In the event of an accident, this data can be relayed immediately to the insurer and to the emergency services for a timely response. The insurers can immediately validate the case and pay the insured amount to the customer. This tech-centric approach is highly reliable for legitimizing claims and eliminating the possibility of fraud. The above mentioned is an example of reactive way of dealing with IOT. We can also use this as proactive way. For example, in motor insurance, the data on the vehicle’s real-time position and performance, traffic and weather data, the driver’s behavioral data, will all be processed through machine learning algorithms. This will lead to the prevention of accidents through valuable feedback to the driver on his driving and vehicle maintenance.


Blockchain Technology

Blockchain is a technology, which can save anything from assets to electronic cash. It has defined ledger that can record transaction, track fraud, reduce and cut cost from underwriting and claims. Blockchain can influence existing business model. However, on the other side of the page, it has many benefits such as in help in reducing human error, detecting frauds claims, increase efficiency, better communication between various insurance departments and many more. Distributed Ledger Technology (DLT) can be useful in sharing data with each block contains a hash (a digital fingerprint or unique identifier), time-stamped batches of recent valid transactions, and the hash of the previous block. The previous block hash links the blocks together and prevents any block from being altered or a block being inserted between two existing blocks. In this way, each subsequent block strengthens the verification of the previous block and hence the entire blockchain. The method renders the blockchain tamper-evident, lending to the key attribute of immutability. In this, anyone can write and new blockchain and anyone can see it in that connected network.  The claims process will become more transparent.

It has been adopted by the insurance industry as blockchain has improved transparency and reduced processing times: Tokyo Marine, a Japanese P&C insurer, tested blockchain for marine cargo insurance certificates. It reportedly reduced the time it took a shipper to receive an insurance certificate by 85 per cent. Insurers can unlock trapped value by combining blockchain with other technologies, too. Accenture has developed a blockchain-based proof of concept that leverages data from smart sensors to enable smart-vineyard insurance. Bajaj Allianz recently launched a blockchain-based travel insurance app Travel Ezee, which pays out claims automatically when there are flight delays. Like for example, if you have a travel insurance and you are going to the airport,  and suddenly you get the information that your flight has been cancelled. Now there is no need to lodge a manual claim and fill up a  claim form, the claim amount will reach your account as soon as your airline operator inform you about delay or cancellation of your flight.

Some of the key blockchain use cases explored by insurers across the globe include death claims management, reinsurance contract management, parametric products (event-based insurance products) and identify authentication. Roughly, 60% of the insurers interviewed said that blockchain adoptability would increase in the market, especially when the ledger is owned and moderated by a third party like the regulator or reinsurer.

Predictive Analytics

It is a tool used in collecting and analyzing data from various sources. This technology helps in managing the risk more efficiently and effectively. It predicts the behavior of the insured with the help of big data. Data can be collected from various sources like smart devices, agents, customer quotation, geographical tracing devices, criminal records, credit history, etc.

It also helps in determining fraud claims. It analyzes various factors in determining the type of loss for example location, sum insured, tenure of the policy, age, income, nature of injury, education etc. This will helps in scoring the claims with the help of flags or numbers based on the chances of risk involved. This will give second chance for claimant to assess the claim of any with the help of similar outcome that happed in the past. It is also helpful in expense management and trend analysis. This kind of technology helps in collecting, analyzing and accessing the data.

For Example, Mutual Liberty Insurance investing in various technologies to manage the risk. They investing in infrared cameras to better understand and access the extend of damages.


Artificial Intelligence and Machine Learning

Text Analytics and Natural Language Processing are two of the major AI changing the way insurance companies provide client services.  Customer mobile apps and websites are now equipped with chatbots that can hold a meaningful conversation with the client any time of the day. Audio, Video and Images are also helping in claims processing and enhance customer satisfaction in a faster way. It is used during the time of inspection and system can automatically assess the risk and can convey the rates and charges to cover the risk.  AI-powered claims could also fight against one of the most costly elements of the insurance industry: fraudulent claims, which cost the industry more than $40 billion a year. Instead of relying on humans to manually comb through reports to catch inaccurate claims, AI algorithms can identify patterns in the data and recognize when something is fraudulent.

Several customer interaction functions can be conducted through AI-based chatbots and voice/speech recognition algorithms. Most leading Indian insurers such as Bajaj Allianz, ICICI Lombard, and Shriram General have deployed chatbots for servicing and other customer functions.


Telematics Insurance

Telematics is a device, which monitors the vehicle by using GPS system. Telematics is derived from Telecommunication and information processing. It helps in providing information to insurance companies. The information can be recorded by a device called black box. Various components of black box are GPS receiver, SIM Card, Engine Interface also it use various algorithm for GPS Logging. A vast amount of data can be collected using black box like speed of the vehicle, distance, time travelled, battery voltage, engine data, number of vehicle on road, weather condition, type of road etc. This can be installed in various motor vehicle like school buses, commercial vehicle, trucks etc. This information is then stored in cloud.

There is an open system telematics which is capable of integrating other devices also like mobile apps, hardware accessories etc. Telematics helps in improving customer services, adjust premiums for insured, efficient decision making while underwriting, optimize the maintenance of vehicle, it can provide accident information, safe-unsafe areas, level of risk involved etc.


Drone Technology

Insurance industry is already deploying and expanding the potential of commercial drones. In Insurance, drones are used for better risk management through improved data collection and other one is reduced operational costs through improved efficiency and effectiveness related to claims.

It has features of capturing high quality pictures from bird eye-view and recent advancement in drones involved audio video facility, which has made easier for insurance companies to assess risk where it is impossible to visit by physically.

It is mostly used in agricultural purpose to collect information on crop conditions. Drones can help in predicting claims more effectively. It can improve the speed with which customers receive settlements and give claims managers a better sense of where and how many staff should be deployed. This can be used at all department of insurance from underwriting to claim settlement.

Drones can be used to collect information about a property before a policy is issued by capturing data on property features that make it less vulnerable and this can facilitate personalized premiums as well.

Robotic Process Automation (RPA)

RPA (Robotic Process Automation) is a tool, which can help any organization to automate the task which consume a lot of time and which are repetitive in nature. As the insurance industry is developing very fast and process becoming more dynamic and complex therefore it is also becoming challenging for the back off staff to manage their task and work is becoming monotonous for them. In addition, manual work increases the chances of error by 60%. RPA can perform task like data entry, capturing, copying, pasting, analyse the risk percentage, flagging the high-risk business etc. RPA will carry out the job more effectively, efficiently and consistently.

Underwriting: RPA can be useful right from the underwriting level as it can help in making the policy itself by analyzing the quotation and can also assess the risk by grading/crediting the risk level of the quotation by using previous data. RPA can collect the data from multiple sources and scan the similar type of risk based on various factors.

Claims Management: By using RPA, claims can be assessed automatically by using previous records of similar case. It also helps in calculating claims efficiently. It will help in improving claims registration process. It can help in sharing of daily report with the management.

Client Servicing: It will help in quick issuance of policy and faster claim settlement, and for company, it will provide efficient data management.

Source: Automation Anywhere

Digital Offices and Innovative Insurance Products

Innovation can come in different forms, from policy disbursement to claim and settlement, enhancing customer experience, while being an enabler to achieve scale. It is also enabling insurers to move ahead and create digital offices, where salespersons could sell insurance policies via mobile and complete the processes within minutes and hours, instead of the numerous s that it used to take earlier.

Insurance product development companies are designing innovative products like Cycle Insurance, Dengue Insurance, Daily Commuter Insurance, etc. Giving wider options and flexibility to customers to choose as per their needs and specifications is spicing up the insurance market. This is simplifying the products and making them reach to customers like never before. Insurance companies are not only dependent on bancassurance, agency or direct sales channel to sell these products, but also some of the channel like web aggregators, Amazon, Flipkart are creating collaborative approach to sell products in untapped market segment. In the next five years, an estimated 500 million first-time internet users are expected to come online via mobile: The Next Half Billion. India has a young, growing middle class, with an increasing awareness for the need of protection and retirements planning, which will support the growth of Indian insurance.

Role of Government Sponsored Socially Oriented Insurance Schemes

  • Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
  • Pradhan Mantri Suraksha Bima Yojana (PMSBY)
  • Life Cover under Pradhan Mantri Jan Dhan Yojana (PMJDY)
  • National Health Protection Scheme

Government is also working as a catalyst and launched few social welfare schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Suraksha Bima Yojana – PMSBY (for accidental death and disability) and Pradhan Mantri Jeevan Jyoti Bima Yojana – PMJJBY (to cover life). More importantly, the government has pushed insurance as a risk management mechanism as Crop Insurance through Pradhan Mantri Fasal Bima Yojana (PMFBY) taking insurance to all the farmers.

At present around 40 per cent farmers are covered under PMFBY and it is expected that by the next 3-4 years 60-70 per cent of farmers are going to be covered through this crop insurance scheme thereby addressing the major problem of ‘rural distress’, which India has been facing over the decades. As 20 per cent of the premium in the non-life sector is funded and driven by the government, the challenge for the insurance sector is to manage these insurances well, delivering value to the rural beneficiaries and making the schemes sustainable


Role of IRDA in Increasing Insurance penetration (Through Insurtech)

Motor insurance is mandatory as per Motor Vehicles Act but about 60 to 70% of two-wheelers and 20% of cars are uninsured despite it being mandatory. This happens mainly due to lack of reach and distributor interest in pursuing small-ticket premiums. “Consumer surveys show that while most consumers want to insure their bikes, they are currently clueless about where to find an insurance agent or insurance branch office to get this done.

IRDAI has also allowed insurance intermediaries such as brokers to sponsor the training and certification of POS agents. “With increased use of digital mode… there was increased focus on point of sale products and simple to use channels to increase penetration of general insurance products in sub-urban and rural areas, IRDAI too has taken initiatives to innovate with distribution channels like Point of Sales (POS) and Common Service Centers (CSC), so that simple pre-underwritten products with lesser/minimum sum insured could be sold in villages and other small towns and cities.

The technology has played a very important role in appointing POS and CSC agents. Most of the Insurers have done an API Integration with these Common service centers to ensure fast issuance and delivery of insurance policies. Through the use of technology now Insurers can appoint POS agents very quickly, They can pass their exams very easily through the use of insurer’s mobile app. Some of the Insurers has started providing training to staff of schools and colleges, NGO’s, post offices, banks, panchayats, other trusted villagers and local language speaking engaging them for solicitation of insurance products in their respective areas. We know that insurance has been largely a ‘Push’ product. Innovative seamless distribution and servicing of Insurance products to rural areas and to the majority of households is the key to penetrate these markets.

New IRDA’s Regulation allows Insurers to solicit business through the Insurance self-network platform of an intermediary.

Insurance self-network platforms: denotes the online portals (websites) and mobile applications for selling and servicing of insurance policies.

The majority of insurance products in India are sold through agents and the customers always see it as a ‘push’ product. Many times, the distributors push products without explaining the benefits and limitations of the policy, leading to a high dissatisfaction ratio amongst the customers, but now at the time of issuance of Insurance policy, IRDA has made it mandatory for insurers to share proposal form, Policy wordings and other relevant documents with insured. As per New e-commerce guidelines, insurer has to share OTP with Insured to get his acceptance on the proposal. Insurtech has played an important role in delivering OTP, soft copy of proposal form and policy wordings to insured.

Who can operate such platforms?

All insurers and intermediaries such as corporate agents, Brokers, IMFs and Web Aggregators etc. can operate such platforms. Permission of IRDAI is required for operating on such platforms. Products, which are approved under File and Use, can be sold through self-network platforms.

If we go into the era of pre-internet times, we can easily remember the hassles that we had to go through to purchase an insurance policy but today, things have changed for the better with the boom of the Information Technology in insurance sector, Instead of having to hire local insurance agents or go to any insurer’s office, one can simply go and access the website of a recognized insurance web aggregator Like Policybazzar, Policyx to compare various insurance policies offered by different insurers. Customer can see all the competing features, costs and coverage displayed on a single screen.


Insurtech Advantages:

Cost Reduction: With the help of insurance technology, insurance companies have started using various innovative means to decrease the overall cost base required for risk cover in insurance. This is being done specifically by addressing and mitigating the moral hazard and morale hazard aspects to customer behavior and through that, reducing instances of preventable claims.

Better Customer Experience: Consumers often complain about lack of understanding and transparency while buying insurance, insurance technology has introduced Customer ease in buying insurance, Now Customer can purchase insurance policy instantly through digital mode.

Insurance technology is trying to replace traditional agent’s job wherein his main job was to explain policy exclusion and other important by using a mix of technology and in-house experts.

Product the customer will be willing to buy based on the past digital interactions of the customer. In addition, with big data capabilities, based on customer behavior, the website can be customized in real time, leading to enhanced customer experience.

Customer Segmentation: Advanced analytics techniques can greatly help in arresting customer churn. Predictive Modelling techniques can help predict customers who are likely to surrender their policies in near future. With such insights, the marketing team can prioritize their interactions.

Employee Productivity: Big data infrastructure can significantly boost employee productivity by providing them the Right data at the right time for e.g., if an agent can access all previous interactions between the prospect and the firm, s/he will be better equipped to convert the prospect.

Fraud Detection: Big data capabilities has enabled insurers to store huge data volumes obtained through its own sources and through third parties. This data is getting used to detect various fraud indicators, fraudulent customers, agents, employees, hospitals, doctors, drug stores, etc.

Customer Service: Customer service can be greatly enhanced by using a combination of big data and advanced analytics capabilities. Techniques such as text analytics on unstructured customer email data can identify common pain point themes so that they can be addressed proactively.

Way Forward: The rise of digital technologies in insurance has forced insurers to look at remodeling their current products. The traditional ‘one product for all’ approach will not work well in the future.

Insurers will have to offer low-priced products for specific and need-based coverages like for example (usage-based insurance) a pay-per-mile motor insurance product with price determined on miles that one drives or an event-based insurance. These products are designed to cover only a specific event. For example, a customer might be interested in personal accident coverage while taking a lengthy ride share. Insurers could also look at finding ways to bundle and create customized packages or product offerings for the appropriate customer segments. Many insurers across the globe are bundling group benefits with accident and health coverages. Product packaging also holds a lot of potential for the SME insurance market, given its diverse segments.

To increase the low insurance penetration in India, Insurers should also look at developing new products for new-age risks like the liability risks associated with using digital services across the sharing economy and liability/physical damage risks associated with the use of drones or smart devices.

Insurers should also explore Aadhaar-based biometric authentication for faster customer onboarding and cashless payment processing gave the rise of mobile payment modes (Paytm, UPII, etc.). They can also look to integrate with digital data sources/aggregators such as third-party digital lockers used with government or medical records for automated data entry. Insurers should also look at collaborating with established digital players in the rural segment and leverage their established digital platforms for insurance distribution. For example, insurers could consider integrating with digital TVs, mobile apps and bank ATM technologies and leverage those platforms for their selling and operations.

Indian insurers must increase their focus on restructuring talent pools and upskilling their human resources. Skills are clearly a fundamental factor in creating new digital services. Insurers must therefore identify the right skills required and should look to leverage digital tools such as social media sites to attract today’s younger workforce.



With the rapid use of smartphones, the majority of Indian population is now tech-savvy. The modern Indian is a digital native and has variant lifestyle needs. By 2020, India will be the youngest country in the world with an average age of 29, so it is vital that insurers start considering the unique needs of this demographic. Modern Indian youth are not interested in those policies, which do not speak to their lifestyle. The traditional way of providing insurance cover may no longer yield optimum results. The traditional offline model is broken, difficult, and expensive. Digital partnerships, which allow the insured to see and protect their risks, will lead. It is very much clear that the problem of low insurance penetration can only be solved through the use of insurance technology.  For eradicating the problem of low insurance penetration, It is very important that customers are protected and treated fairly and provided the right and quality products according to their needs.

Technology-led disruptive ideas are essential in changing the face of insurance business and can make a huge impact on Insurers. “According to a Boston Consulting Group (BCG)-Google report, by 2020 every three in four policy purchases will be influenced by the digital channel. Insurance is a highly competitive industry and not traditionally known for innovation, changes in demographics and business models are creating significant new opportunities for insurance companies to defend market share and increase revenue and margins. The need to innovate, and to do so quickly, is now deemed critical by most of the insurance companies.

By 2020, about 315 million Indians in rural areas will be connected to the internet, compared to around 120 million at present, according to a study by BCG: The Rising Connected Consumer in Rural India. Technology has played an important role in giving boost to several sectors like e-commerce. However, in e-commerce, the current IRDAI’s regulations do not allow discounts when selling insurance. IRDAI; the regulator should allow differential pricing for products sold through insurance self-network platforms.

The latest regulations issued by IRDAI on e-commerce has removed tedious processes such as physical signatures, by bringing in digital signatures and other authentication methods like one-time passwords. IRDAI should also launched “Insurtech Sandbox” to facilitate pilot trails on Insurance technology. This Insurtech Sandbox should allow Indian insurers to experiment with new technology without the need to achieve full compliance with the IRDAI’s usual regulatory requirements. Under the Sandbox initiative, pilot trials of Insurtech applications should be conducted in a controlled environment with sufficient safeguards for policyholders.

One must understand and be aware of insured’s risk for providing desired coverage. Insurance is and will continue to be a push-product. No one wakes up excited that they are going to buy insurance today, but insurers should change that perception. If customer has a fitness goal, so he should get a policy with their gym membership. If customer is commuting between Delhi and Noida for his new job, insurer should have policy to cover the commute. The future of insurance distribution lies in creating that context.

In short, we can say that future of insurance in India is very bright and big thanks go to the Government  of India for their digital initiatives like  “Make in  India” and “Start-up  India”. The credit also goes to the regulator (IRDAI), who has brought new e-commerce guidelines, POS concept and concept of Web Agregators. The above-mentioned initiatives  have played a very important role in increasing insurance penetration in India.

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